UNIT 6 MC

Recession is defined as two or more consecutive quarters of economic decline. It would have to be at least six quarters to be considered a

Depression

To reflect a more accurate picture of economic results, gross domestic product is adjusted

for inflation.

Ana is a bond analyst who notices a wider credit spread between Treasury bonds and AAA corporate debt. From this, she would be most likely to infer

the economy is weakening.

In the secondary market, U.S. Treasury bond prices are most influenced by

the inflation rate.

A positive, or normal, yield curve results when the yields increase as maturities do.

true

If the yield curve is positive (sloping upward), this means that long-term interest rates are

higher than short-term rates.

Interest rates are rising. An analyst would be most likely to state that the business cycle is in which stage?

Expansion

A common measurement used to evaluate attitudes regarding future economic conditions is the difference in yields between U.S. Treasury bonds and corporate bonds. This is known as

a yield spread.

An inverted, or negative, yield curve is one that results when debt with short-term maturities has

higher yields than those with maturities that are longer.

In comparing the change in the GDP from one year to another, to arrive at an accurate figure, each year's GDP should be converted to which of the following?

Constant dollars

Which of the following is considered the most accurate method of measuring GDP?

Constant dollars

When analyzing the business cycle, you would expect which phase to occur before reaching the trough?

Contraction